Australia is becoming a key global testing ground for compelling big technology platforms to financially support the news industry after the government unveiled draft legislation. News Bargaining Incentive (NBI) This legislation clearly stipulates that if Meta, Google, and TikTok refuse to negotiate deals with domestic news organizations, they must pay a “2.25% tax” on their Australian revenues. The collected funds will support media organizations to strengthen the news sector in Australia.
Back in 2021, Australia passed a law requiring platforms to pay media companies (News Media Bargaining Code). However, the law’s terms allowed platforms to remove news content to avoid payments. Meta exercised this in 2024, reducing public access to news, causing immediate revenue loss for newsrooms and leading to significant layoffs.
Meta’s decision exposed a major legal loophole, prompting a new draft law designed to close this gap. Under the new rules, platforms must pay the tax regardless of whether they publish news content.
The new draft requires the three platforms (Meta, Google, and TikTok) to pay a 2.25% tax on their Australian revenue if they cannot reach commercial agreements with local news outlets. The more deals they make, the lower the tax rate, potentially dropping to 1.5%.
Collected funds will go to the government and be allocated to news organizations based on the number of journalists employed. Platforms will receive greater tax reductions if they strike deals with smaller media, aligning with government goals to support small outlets. The initiative is expected to generate around AUD 200-250 million back into Australian media.
Anika Wells, Minister for Communications, said that people increasingly receive news directly from Facebook, TikTok, and Google. She considers it fair that large digital platforms contribute to supporting news work, which adds value to their feeds and generates revenue. She emphasized,“Platforms should make agreements with news organizations; if they don’t, they will have to pay more.”
Meanwhile, a joint statement from major Australian media executives, including Nine Entertainment, the Australian Broadcasting Corporation (ABC), and News Corp Australia, described the plan as “a crucial step to secure the future of Australia’s news industry.” They said, “If digital platforms do not pay for the news content that generates their revenue, media businesses cannot remain sustainable.”
Meta’s spokesperson strongly disagreed, arguing that the idea platforms take news content from publishers “is not true.” They warned this model would make media dependent on government subsidies and called it another form of Digital Services Tax.
Google also opposed the tax, stating that although they are reviewing the draft law, they clearly disagree with the necessity of this tax. TikTok declined to comment.
The U.S. government under Donald Trump consistently opposed digital taxes targeting American tech companies, threatening retaliatory import tariffs against countries pursuing such policies. Recently, Trump warned the UK it could face higher taxes if it did not repeal digital taxes charged to companies like Google, Meta, and Apple.
The Australian government, led by Prime Minister Anthony Albanese, is committed to replacing the 2021 law with the NBI draft, citing the previous law’s ineffectiveness. They reaffirm Australia’s sovereignty and stated, “Government decisions are based on national interest.”
Australia is not alone in this effort; Canada, Brazil, and the European Union (EU) have similar initiatives but with varying outcomes. In Canada, a 2023 law led Meta to remove news from its platform, Brazil’s law has been under review since 2019, and the EU has regulations but inconsistent enforcement.
Conversely, South Africa is seen as a clear example where regulators successfully negotiated direct agreements with Google, Meta, TikTok, and Microsoft, totaling about 40 million U.S. dollars over five years to support local media.
If approved, this law’s tax collection will begin in the 2025-2026 fiscal year starting 1 July. It will apply to companies operating significant social media or search engine services in Australia with revenues exceeding AUD 250 million (approximately USD 179.3 million). This covers Meta, Google, and TikTok, the latter added to the draft more recently.
Source Information Reuters
Follow the Facebook page: Thairath Money at this link -